Volkswagen has signed a strategic partnership agreement with the Chinese battery giant, CATL. Major players in the automotive sector will develop cost-effective competitive batteries and work on battery replacement and recycling. German automaker Volkswagen is joining forces with CATL in China to strengthen the local supply chain and develop V2G (vehicle-to-grid) technology. Under the agreement, the two companies aim to develop cost-effective and high-performance batteries. The partnership also includes various projects in battery recycling and replacement areas. Volkswagen Group China Vice President Alfonso Sancha stated, “By deepening our collaboration with CATL, we will create high-performance, cost-effective battery solutions. Our main task is to establish a strong local supply system.”

AIM TO INCREASE MARKET SHARE IN CHINA
Volkswagen Group achieved 2.9 million vehicle sales in China in 2024. This figure represents a 10% decrease in sales compared to 2023. The German giant is taking significant steps to strengthen its position in China, the world’s largest automotive market. VW announced last year it would invest 2.5 billion euros in China. Volkswagen, having acquired a 700 million dollar stake from the electric vehicle initiative Xpeng last year, aims to launch two cars under this brand this year. The company will also produce special electric vehicles to be sold only in China under the Audi brand in partnership with the Chinese manufacturer SAIC.

LEADERSHIP IN TESLA
Tesla, the company that showed the most significant success in China last year, remained the leader in the world’s largest electric vehicle market. Tesla’s Model Y became the best-selling vehicle in China in 2024 with 480,309 units sold. BYD Auto, a China-based automotive company, followed Tesla. With its affordable electric vehicle models, BYD’s Qin Plus model became the second best-selling car after the Model Y. Volkswagen ranked third after BYD in 2024. It is expected that the German giant will continue to increase its investments in China to avoid falling behind in the competition.

CATL CONTINUES TO GROW
CATL, the largest battery supplier in China and the world, holds a high market share of 45.5% in this area. The company also offers services to other major companies such as Tesla, BMW, Nio, Mercedes-Benz, Xpeng, and Geely.